Commentary

John Turney
Traders Magazine Online News

Foreign Exchange Infrastructure: Yesterday, Today and Tomorrow

In this exclusive to Traders Magazine, John Turney, Global Head of Outsourced FX at Northern Trust, discusses the evolution of the fx infrastructure and what is to come.

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July 5, 2006

Billion Dollar Securities Savings

By Gregory Bresiger

As previously reported in Traders Magazine (Washington Watch, April), the Securities and Exchange Commission has announced a big Section 31 transaction fee rate cut.

The fee, which is used to pay some of the costs of regulation, is slated to decline from the current $30.70 per million dollars of securities transactions to $15.30 per million this fall, according to SEC officials.

"This is a 50 percent cut and that's huge," said John Giesea, president of the Security Traders Association (STA).

"We're delighted," Giesea added. The STA has been lobbying Congress for years, contending the Section 31 fee generated far more than the costs of regulation. "This is terrific news for investors," said Christopher Cox, chairman of the SEC, in a prepared release, expecting that dealers would pass on savings to investors.

The rate cut becomes effective sometime in October. That's when the SEC is scheduled to receive its new budget for the fiscal year.

The overall saving in the Section 31 rate reduction, along with some registration fee cuts, will come to about $1 billion yearly, according to SEC officials.